Our opinion on the current state of WKFWorkforce (WKF) operates as a diversified labor broker, providing services in recruitment, specialist staffing, training, consulting, employee health management, and the sale of financial and insurance products. The company faced a significant legal challenge with the "Assign" case, which clarified the status of temporary employees and legitimized the labor broking industry.
Despite the legal clarity, Workforce has encountered challenges, including the need to reduce staff by 10% to 15%. However, the company has diversified its offerings away from labor broking into insurance and other products, which has helped mitigate some risks.
In its financial results for the year ending December 31, 2023, Workforce reported a 4% increase in revenue. However, the company experienced a headline loss of 13.3 cents per share, a stark contrast to the profit of 46.8 cents per share in the previous period. Workforce attributed this performance to a harsh operating environment, where increased overheads outpaced revenue growth.
One challenge for private investors considering investing in Workforce is the liquidity of its shares. Only 8% of its issued shares are available to the public, and trading occurs sporadically. Given this illiquidity, it may not be practical for private investors to invest in the company's shares.
In conclusion, while Workforce has diversified its services and faced legal challenges, its financial performance and illiquid shares pose challenges for private investors. Therefore, investing in Workforce may not be advisable due to these factors.
WKF trade ideas
Our opinion on the current state of WKFWorkforce (WKF) operates as a comprehensive labor broker, offering recruitment, specialist staffing, training, consulting, employee health management, and financial and insurance products. The landmark "Assign" case decision by the Constitutional Court clarified the relationship dynamics within the labor broker industry, establishing a tri-partite relationship between the labor broker, the employee, and the client. According to this ruling, temporary employees would be deemed permanent after three consecutive months of employment, providing much-needed clarity to the status of temporary workers.
Workforce has strategically diversified its offerings beyond labor broking into insurance and other ancillary products, which has been advantageous for its business. However, in its results for the six months ending June 30, 2023, the company reported a 7% increase in revenue but a significant decline in headline earnings per share (HEPS), dropping to 1.7c from 14.7c in the previous period. The company attributed this decline to various factors including low economic activity, load shedding, high interest rates, decreased client confidence, and reduced demand for personnel services. Additionally, overhead costs rose by 12% due to inflation rates and operating expenses.
To mitigate these challenges, Workforce has initiated a workforce reduction plan, aiming to decrease staff by 10% to 15%. However, despite these efforts, the company projected a headline loss for the year ending December 31, 2023, estimating between 11.36c and 16.04c loss per share compared to a profit of 46.8c in the previous year.
One notable limitation of investing in Workforce from a private investor's perspective is its thinly traded nature. With only 8% of its issued shares available to the public and sporadic trading activity, the share lacks the liquidity necessary to justify investment. As a result, it may not be a viable option for private investors seeking to enter the market. Therefore, we do not recommend investing in this share due to its limited liquidity and trading activity.
Our opinion on the current state of WKFWorkforce (WKF) is a labour broker that also does recruitment, specialist staffing, training, consulting, employee health management and sells financial and insurance products. The Constitutional Court decision known as the "Assign" case found that a tri-partite relationship existed between the labour broker, the employee and the client and that temporary employees would be regarded as permanent after they had been continuously employed for a period of three months or longer. This ruling legitimised the labour broking industry and gave clarity to the position of temporary workers. Workforce has benefited from its diversification away from labour broking into insurance and other products. In its results for the 6 months to 30th June 2023 the company reported revenue up 7% and headline earnings per share (HEPS) of 1,7c compared with 14,7c in the previous period. The company blamed, "...low levels of economic activity, loadshedding, high interest rates, lack of client confidence, and decreased demand for personnel services. Overhead costs increased by 12% because of burgeoning inflation rates and operating expenses". The company is reducing its staff by 10% - 15%. The problem with this share from a private investor's perspective is that it is too thinly traded to justify investment. Only 8% of its issued shares are available to the public and they are traded only sporadically. For this reason, we cannot recommend investing in this share.
Our opinion on the current state of WKFWorkforce (WKF) is a labour broker that also does recruitment, specialist staffing, training, consulting, employee health management and sells financial and insurance products. The Constitutional Court decision known as the "Assign" case found that a tri-partite relationship existed between the labour broker, the employee and the client and that temporary employees would be regarded as permanent after they had been continuously employed for a period of three months or longer. This ruling legitimised the labour broking industry and gave clarity to the position of temporary workers. Workforce has benefited from its diversification away from labour broking into insurance and other products. In its results for the 6 months to 30th June 2023 the company reported revenue up 7% and headline earnings per share (HEPS) of 1,7c compared with 14,7c in the previous period. The company blamed, "...low levels of economic activity, loadshedding, high interest rates, lack of client confidence, and decreased demand for personnel services. Overhead costs increased by 12% because of burgeoning inflation rates and operating expenses". The company is reducing its staff by 10% - 15%. The problem with this share from a private investor's perspective is that it is too thinly traded to justify investment. Only 8% of its issued shares are available to the public and they are traded only sporadically. For this reason, we cannot recommend investing in this share.
Our opinion on the current state of WKF.Workforce (WKF) is a labour broker that also does recruitment, specialist staffing, training, consulting, employee health management and sells financial and insurance products. The Constitutional Court decision known as the "Assign" case found that a tri-partite relationship existed between the labour broker, the employee and the client and that temporary employees would be regarded as permanent after they had been continuously employed for a period of three months or longer. This ruling legitimised the labour broking industry and gave clarity to the position of temporary workers. Workforce has benefited from its diversification away from labour broking into insurance and other products. In its results for the 6 months to 30th June 2023 the company reported revenue up 7% and headline earnings per share (HEPS) of 1,7c compared with 14,7c in the previous period. The company blamed, "low levels of economic activity, loadshedding, high interest rates, lack of client confidence, and decreased demand for personnel services. Overhead costs increased by 12% because of burgeoning inflation rates and operating expenses". The problem with this share from a private investor's perspective is that it is too thinly traded to justify investment. Only 8% of its issued shares are available to the public and they are traded only sporadically. For this reason, we cannot recommend investing in this share.
